Buyers will pay price for piracy

24 November 2008
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24 November 2008

Buyers face increased shipping costs and longer waits for goods as tanker firms seek to avoid pirates operating out of Somalia. Intertanko, the organisation for tanker operators, and Intercargo, the association of dry cargo ship owners, have reported members are switching routes to around the coast of Africa, to avoid the Suez Canal.

It follows the hijacking of supertanker Sirius Star off the coast of Africa last week. Pirates demanded $25 million (£16.78 million) for the release of the vessel and its cargo of two million barrels of oil bound for the US.

In an open letter to governments and the UN, the two organisations and other shipping groups, said the situation was "intolerable".

Intercargo warned that re-routing shipments around Africa can add weeks to delivery times and increases vessel hiring costs, which are passed along the supply chain. The International Chamber of Shipping and International Shipping Federation warned in September that changing routes would have "severe consequences for international trade, the maintenance of inventories and the price of fuel and raw materials".

SMnov2008

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